Vestin chief exec explains Namath ads’ disappearance

Kevin Rademacher

Thursday, May 13, 2004 | 10:48 a.m.

Retired football star Joe Namath was released as spokesman for Las Vegas-based Vestin Group Inc. because of an embarrassing incident last year during an nationally televised game, Michael Shustek, Vestin's chief executive, said on Wednesday.

Namath attracted negative press after slurring his speech and making advances toward ESPN reporter Suzy Kolber during a sideline interview at a New York Jets football game in December 2003. A month later Namath said in a television interview he would begin counseling for alcohol abuse.

Namath signed a contract as a spokesman for Vestin, a Las Vegas-based commercial lender, in 2001.

In an April filing with the Securities and Exchange Commission, Vestin said that a contract clause allowed the company to "terminate the licensing agreement in the event ... Mr. Namath's conduct has reflected so seriously on Mr. Namath's public reputation as to prejudice substantially the company's business interests if the license agreement were to continue."

"That (incident) is the one we referenced to," Shustek said after making a presentation at the Las Vegas Money Show investment conference.

In its earnings announcement last week, Vestin said it took a non-cash charge of $1.8 million in stock warrants paid to end the contract with Namath. In the April filing, Vestin indicated that Namath's public relations firm -- Planned Licensing Inc. -- was contesting Vestin's move and had "threatened to initiate litigation regarding its termination."

Shustek said there were still no guarantees that Namath's representatives would not file a lawsuit against Vestin. He added that Vestin's exposure in the issues would likely not exceed $2 million on top of the $1.8 million in stock warrants already issued.

Namath's manager and former Vestin director James Walsh could not be reached for comment.

"At the end of the day, I love Joe like a brother," Shustek said. "I have spoken with Joe since. Joe understands ... Joe has other ways of making money. This is my only business."

Shustek said the company decided to split with Namath after receiving numerous complaints from Vestin investors after the interview was replayed on several national television programs and received national newspaper attention.

Also at the conference, Shustek said the company's Vestin Fund III -- which in addition to making real estate-backed loans, will also buy investment property -- is preparing to make its first purchase. He said the 3-month-old fund should close on the property, which he would not identify, within the next few weeks.

In other Vestin news, a lawsuit brought by the company against John M. Foster Turf Farms Inc., Pinnacle Golf Construction, Familian Northwest (doing business as) Plumber's Supply, Turf Equipment Supply Co., and Bullock Brothers Engineering Inc. was reopened last month.

Vestin officials said it was reopened to clear the title of the Arroyo Heights development in Mesquite, a foreclosure case settled earlier this year.

Separately, a trail date has been set for Nov. 29 in a 2002 lawsuit brought by the Gary A. Wexler Revocable Family Trust against Vestin Fund I, court records indicate. The trust, and Gary Wexler individually, claim Vestin acted improperly in foreclosing on a property secured by a $2.3 million trust deed through the lender.

A Vestin spokesman said the company does not comment on pending litigation.